Donald Trump does not understand how the stock market works.

[DetlefK]

https://www.thedailybeast.com/trump-suggests-stock-market-gains-are-reducing-debt

“The country—we took it over and owed over $20 trillion. As you know the last eight years, they borrowed more than it did in the whole history of our country. So they borrowed more than $10 trillion, right? And yet, we picked up $5.2 trillion just in the stock market,” Trump told Sean Hannity. “So you could say, in one sense, we’re really increasing values. And maybe in a sense, we’re reducing debt. But we’re very honored by it,”



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He does not understand that the stock market is just virtual money created by banks and invested in virtual values also created by banks. About 90% of that money has no real-life counterpart. There is several times (IIRC 7 times) more money invested in stocks and bonds than the entire economy of planet Earth is even worth.

The value itself of the stock market has no meaning.



I, for one, am looking forward to 2018. Stock market analysts have long said that the behavior of the stock market has been irregular since 2009: Too much growth.
They are expecting the stock market to level, or even to slightly go down, in 2018.

Let's see if Trump also takes responsibility for the stock market when it's going down.

[Itchinjim]

1. After reading that gibberish, I'd say he doesn't understand how the English language works

either.

[imanamerican63]

2. He thinks he invented the stock market with his little hands!

[TEB]

3. How deep does his stupidity go

[Dustlawyer]

18. I hope we never have to find out!

We are trapped in a dysfunctional system where the normal checks and balances do not work due to our corrupt campaign finance system. He should have been impeached and removed from office by now if it did, but big Republican Donors want their tax cuts and will not let them. They cannot get re-elected without these major Donor's support so they ignore the problem at the risk of our country and the welfare of it's citizens.

Our corporate media love all of the campaign cash so they will never report the problems caused by the inherent flaw in our system. They only report one or two stories at a time and beat them to death. They do not inform us, only manipulate our thoughts.

The root cause of most of our problems is the legalized bribery of the politicians and the illegal quid pro quo's that go on. When a Health Care bill has 12% approval nationwide and they keep pushing for it anyway should be some big evidence of quid pro quo. When assault weapons background checks have a 90% approval nationwide after the slaughter of 20 plus innocent children and nothing happens except to make guns MORE AVAILABLE there is a quid pro quo happening! No one is investigation this illegal practice!

We need to focus on campaign finance reform and/or publicly funded elections to take the money out of the equation. Our representatives (who now just represent donors) spend most of their time fund raising instead of drafting and reading bills. We get too busy chasing the symptoms of this most basic problem. We fight on all of these different issues when we should know that they stem from the root cause, the money in our politics. It has allowed a shadow government to run the country through the politicians and judges they own.

[KY_EnviroGuy]

4. He needs to publish a new book.

"The Art of Pulling Stuff Out of Your Ass"

[underpants]

5. And Hannity probably just nodded along

I am convinced that Trump thinks he gets to keep any money that's not spent.

[genxlib]

6. If anything

It is closer to the opposite. The primary reason the stock market is up is because they have been promised huge benefits in the way of tax cuts, privatization and deregulation.

The deficit will go up

[LuckyCharms]

7. Exactly. And this is why most presidents don't make a huge deal about market increases. n/t

[Dave Starsky]

8. Trump doesn't understand how ___________ works.

Choose a noun.

[Jim Lane]

24. "pandering"

To be fair to Trump, he understands how that works. He's good at pandering to his base.

You could also make a case for "self-promotion" although his skill at that was more evident when he was in the private sector. He doesn't understand it as well in the context of being a public official, with the result that many of his more recent efforts at self-promotion have actually undermined his image. The interview cited in the OP is a good example.

[thesquanderer]

9. Dishonest/stupid in two more ways...

1. Notice how (ridiculous as it is) he argues that stock gains under his presidency countered debt, but the huge stock gains under Obama didn't.

2. He's looking at it the way someone would look at personal net worth. If you go further into debt but stock you own has appreciated, from a net worth perspective, your debt is reduced by the stock appreciation. But in that case, it is YOUR debt and YOUR stock ownership. In this case, the country doesn't ow the stock! it is the COUNTRY's debt versus stock owned by OTHER PEOPLE. So it would be like saying that your own increased personal debt is offset in your net worth by your neighbor's gains in the stock market.

[WinkyDink]

10. I'm not looking forward to cutting off my nose to spite my face, aka, financial accounts.

[Ilsa]

11. Oh, yeah, lets use that new stock market wealth

to pay down the national debt. See how that flies.

[knightmaar]

20. You could do it using a Special Government Power!

It's called "taxation".

[GoCubsGo]

12. Donald doesn't understand how ANYTHING works.

That is becoming quite obvious. Tillerson insulted fucking morons when he called that imbecile a "fucking moron." The depths of this man's stupidity know no bottom.

[knightmaar]

13. Stock market analysts calling the top?

Tell me something I haven't heard before.

Some were advising to get out a month ago, "Oh noes, the bottom is coming!"

If I'd bugged out then, I'd be out 5.5%. That's not how the market works. Good luck timing market, though.

[DetlefK]

14. It's a question of "when", not "if".

[ProfessorGAC]

16. Don't Agree

Several macroeconomic indicators, most notably UE and per capita domestic output support the market growth
Not 100% but a very high %
This isn't the 90's where tech stocks inflated based upon potential but not actual economic activity.

[DetlefK]

23. Apologies, I failed to explain my point.

The problem is that the stock market is supposed to short-term-fluctuate up and down with a certain period, as people buy and sell on a regular basis. However, since 2009 that up-and-down behavior has disappeared: People are no longer investing in and out of a broad spectrum of stocks but deal only in few big-name stocks. -> The stock market is uncharacteristically calm.

When people move their investments back to a broader diversification (-> estimated to happen in 2018...), they will pull money out of the big-name stocks and put it into lesser-known stocks, and that will cause the Dow Jones to go down, as it's indexed from the big-name companies.



Of course, if Trump stirs up a certain amount of economic anxiety and fear to invest in lesser-known stocks, then there won't be a trend towards diversification.

[knightmaar]

21. Well, yes ...

... someday, there will be a recession.

<shrug>

[spanone]

15. to quote the secretary of state...he's a fucking moron

[unblock]

17. if they succeed in cutting corporate taxes and/or making a corporate tax holiday,

then trillions of dollars american companies have been hiding offshore will be repatriated to america.

what will they do with the money now that it's in america?

investment opportunities here are generally well-funded already, so mostly that extra money will just create higher demand for existing investments -- stocks, real estate, etc.

i.e., it will create and asset bubble.

so if this comes to pass, 2018 might well be a banner year for the stock market, but it will be setting up an even bigger crash in 2019 or 2020.

[former9thward]

19. The stock market is not "just virtual money created by banks"

And banks do not create "virtual values" of stocks. That is CT nonsense. Real money is invested or withdrawn which creates the real value of an individual stock at that moment. And your math is terrible also. The market went from 14000 in 2007 to 6500 in 2009 at the low. That is a 50% drop. If there were 7 times the amount of money invested than the entire planet then a 50% drop would have the entire earth in the stone age. We had a bad recession in Western countries but that was it. The rest of the planet didn't even blink.

[ck4829]

22. K&R. This is the same stock market that jumped in anticipation of a "quick Iraq war"

The stock market predicts fate as well as feeling the bumps on your head does.